Driscoll gets $14M to aid in covering Medicaid gap

Funds ensure programs won't be cut

In the next few months, officials at Driscoll Children's Hospital
expect the first payment of a $14 million fund - money that will be put
back into programs for children in South Texas during the next two
years - thanks to state legislation called the Upper Payment Limit.

The payment limit helps the hospital recoup expenses unpaid by
Medicaid. Medicaid payments fall short of the cost of caring for the
children, leaving an annual $16 million gap that must be offset by
fundraisers, donations or grants.

Otherwise, the hospital has to eat the cost, taking funds away from
programs such as the new organ transplant unit or work with fewer
physicians and specialists.

"The cost is going to be higher as a children's hospital because we
get the sickest of the sick kids," said Rick Merrill, president and
chief executive officer of the hospital. "Those are programs that
aren't cheap and easy to start, and these

dollars help sustain existing programs and start new programs."

That means better access to care for children in South Texas.
Families won't have to drive to Houston or Dallas anymore to receive
transplants, he said; they can stay closer to home.

At 71 percent, Driscoll Children's Hospital also has the second
highest percentage of children on Medicaid in Texas because of the
economics of the region. But because children can't vote, Merrill said,
children's programs are left susceptible to funding cuts in the
Legislature. But saving money today could leave tomorrow's economy in
trouble, he said.

"If we do nothing for these kids but put Band-Aids on their
problems, then we are in for some difficult times in our work force in
the future," he said, because an unhealthy work force could have a huge
economic impact on the area in 10 to 30 years.

The money also helps physicians do their jobs better because they
don't have to worry about turning away patients who can't afford
treatment, said Dr. Mary Dale Peterson, pediatric anesthesiologist and
medical director for Driscoll Children's Health Plan. It also allows
the hospital to invest in modern updates, such as electronic patient
records, she said.

"Those Upper Payment Limits definitely stabilize the system so we
can continue to recruit physicians where we're dealing with shortages,
especially in some of the pediatric specialties," she said. "We really
can't do our job well unless the hospital is able to keep up with those
capital costs. We need the hospital to be solvent so we can continue to
do our jobs."